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東京大学公共政策大学院 | GraSPP / Graduate School of Public Policy | The university of Tokyo

西沢利郎教授がドイチェ・ヴェレ(ドイツ国営国際公共放送)の「隠れ債務」論争に関する取材に答えました 2021年10月14日(木)


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Professor Toshiro Nishizawa’s views on hidden debt” controversy quoted by Deutsche Welle (DW), a Germany’s international broadcaster, are summarized as follows.

Generally speaking, debt owed or guaranteed by sovereign borrowers might be negotiated for possible debt relief or restructuring in international fora, such as Paris Club or G20. China claims that some of their loans are purely commercial beyond the scope of negotiation in such international fora and that bilateral treatment between the lenders and borrowers is suitable.

Debt could be a problem for debtors, but also for lenders. A “debt trap” is a double-edged sword. Both China and borrowing countries have been justifying the deal with the goal to achieve “a shared economic pie,” but they are becoming aware that the deal could lead to a shared “debt trap.” Chinese government knows that Chinese lenders may accumulate non-performing loans.

I always insist that it is too simplistic to say that countries will be a victim of the debt-trap diplomacy. I presume that China is pragmatic and not as mighty aggressive as often characterized due to various constraints facing itself.

The existing and ongoing mega projects under the Belt and Road Initiative (BRI), unless reinforced to generate higher economic and social returns, will get all the stakeholders suffer from white elephants. This should be one of the reasons for China to be increasingly inclined to equity investment rather than lending since a few years ago. This inclination is perhaps attractive for countries with heavy debt burden to achieve their dual purposes of securing foreign exchange to make external debt-service payments and of drawing people’s attention to their efforts to invite foreign direct investments especially in difficult times under the pandemic.